The Canadian dollar picked up support against the US dollar for the first time in four days on the wings of a surprisingly resilient Canadian labour market in December. Employment data coming from the US was less spectacular, weighing on the greenback with the start of the New York session.
After a series of weak macroeconomic data coming from Canada recently, the crucial jobs report beat market expectations to the upside, easing bets of a rate cut at the next Bank of Canada meeting in January.
The Canadian economy added 35.2K new jobs in December after two straight monthly declines. The December report came in well above market forecasts of a 24.9K gain and showed a strong rebound after a disappointing November report that saw the number of jobs falling by 71.2K.
The total number of jobs added in 2019 climbed to 320K, marking the second-best year since 2007.
The employment gain was mostly driven by new full-time jobs that rose by 38K in December. Part-time employment somewhat offset that gain in the total employment number with a 3K drop.
The unemployment rate in December also came in better than expected, falling to 5.6% from 5.9% the month before.
Compared to the upbeat Canadian labour market numbers, the US non-farm payrolls report came in less stellar. The US economy added 145K new jobs in December, missing market forecasts of a 162K rise and falling well behind the 256K gain in November.
Average hourly earnings rose by 0.1%, while the unemployment rate held steady at 3.5% in December.
Charts show a powerful bearish pinbar candle that retraced at the 1.31 mark in yesterday’s trade. Today, the price fell below the resistance at 1.3050 and a decisive close below that level could see the price retest the recent lows around the mid-1.29s.
As of 2:30 p.m. London time, the Canadian dollar traded at 1.3038 against the US dollar.